Taxachusetts Boat Excise Tax question

Jan 30, 2012
1,123
Nor'Sea 27 "Kiwanda" Portland/ Anacortes
: Here's a case where a boat owner had to pay over $60,000 ($20,000 in penalties) because of an accident when his wife went to register the dinghy. .
Yes by all means read the case. The taxpayer simply decides to cheat (in three separate states by the way) and was eventually caught.

Charles
 
Jun 14, 2010
2,081
Robertson & Caine 2017 Leopard 40 CT
Feb 11, 2017
1
Thanks very much for your very accurate post. As a RI attorney who represents lots of boat owners, that recent case is very helpful...
 
Jul 19, 2013
384
Pearson 31-2 Boston
I think the OP should be prepared to receive a demand letter from the state for the 6.25% use tax, plus interest and a penalty fee base on a date 20 days from the start date of the mooring permit. Below is the current MA law regarding boat excise taxes, from http://www.mass.gov/dor/businesses/...stee-taxes/sales-and-use-tax.html#OverviewUse for the following:
"Boats, recreation vehicles, snow vehicles, motor vehicles, trailers, or other vehicles: the tax is reported and paid as follows:
>Boats, recreation or snow vehicles: the purchaser must file Form ST-6 by using the Online ST-6 Application and pay the use tax by the twentieth day of the month following the purchase, use, storage, or other consumption of such boat, recreation or snow vehicle within Massachusetts;
.."
If the OP does not live in Massachusetts, has no personal financial accounts in MA-situs financial institutions, and won't ever return the boat to MA, then I think he can ignore the demand letter. Otherwise, he should go into the MA EP office and confirm whether my understanding of this requirement is correct, and if so, make the necessary payment. Otherwise MA will accrue interest until the payment is received; a few months after the demand letter MA will attempt to attach any accounts or property the OP has in the state for the satisfaction of the demand amount plus the running interest.

Somewhere in a MA tax office some temp is slowly compiling mooring permit lists to compare the boats with mooring permits with a list of sales/use tax payment received.

Now if the OP is/was a MA resident, then the interest demand will go back to the purchase date of the boat. The OP can avoid this extended interest period provided you can prove you kept the boat out of MA for the period of time prior to the Cape mooring.

Back in the late 90's, as a former MA resident then living in Minnesota I paid a use tax demand amount for a boat I had bought in ME in the '80s, had never registered in MA, and had sold four years earlier when I moved to Minnesota. I learned MA tax folks periodically audit the sales records of ME brokers and builders, and if they find a MA buyer, you will be required to pay the use tax, penalty, and interest unless you can prove that you never brought the boat into MA, which I could not. After a year of back and forth, anticipating an eventual return to MA, I negotiated the debt back to just the use tax, and paid that.

Now I don't know that there may be some weasel-room somehow on the law above - it is my understanding that the release from the tax obligation after six months outside the state ended in 1995, it is certainly not reflected in any MA text that I could find.